Elder Offers Their Side in St. Joseph Dispute

By Ellis Codjoe, May 16, 2019

Wednesday, Blackbird Investments provided a statement to the city of Ottumwa in regards to the standstill at the former St. Joseph Hospital. A day later, the other entity involved in the dispute offered their side of the argument.

Ottumwa Radio News reached out to Elder Construction for a response to Blackbird’s claims. James McFadden, Elder’s Chief Operations Officer, expressed empathy to Ottumwa before explaining the nature of the dispute.

“Elder Corporation has refrained from commenting on this through Radio, TV and Print.  This should and is intended to be Elder’s only comment.

Elder Corporation is sympathetic towards the residents of Ottumwa, Iowa over this project.  We ceased demolition on the contract between Elder and the owner.  Since that time the owner has been working with Elder to resolve those differences amicably and swiftly.  Should they have followed through with a couple of requests made by Elder Corporation, we had made the offer to return and finish the work.  However we are currently waiting on payment and working on a mutual release between the two companies and waiting on a response.  I understand Blackbird may have contracted the rest of the demolition work to another contractor.  We will endeavor to help them with that process.”

McFadden agreed that his company has been paid the sum Blackbird mentioned in their statement. However, Elder disagrees with the amount of work that has been done.

“I will confirm that we have been paid the approx. amount that was stated by Blackbird, which represents about 45% of the overall Elder contract value.  The $1.37 million paid amount (or 45% of the contract paid amount) is significantly higher than the stated “16% of the demolition work to be complete” as factually mentioned in Blackbirds news release.  I have requested from Blackbird how that was calculated and have not been provided a response.  There was more than just demolition performed on the site.  Additionally we have removed the building contents, gutted the building, disposed of debris to a landfill and had abated all three buildings, two of them have been fully taken down.”

According to McFadden, Elder went to a third party last year to find a resolution.

“Last fall Elder Corporation requested the assistance from a Des Moines based reputable demolition contractor to provide a cost to finish the work as the payment dispute was ongoing.  They were asked to provide an estimate to complete the work, which, if Blackbird wanted to hire them to complete the work that the reputable contractor could and would stand behind their quote.  A copy of that quote was provided to Blackbird.  That quote along with a few items to have been completed by Elder (saw cutting, removal and stockpile of the parking lot, crushing of the paving, etc) was still less money than the amount left to bill on the project at the time of our departure, meaning we were underbilled.  Furthermore through the Arbitration process we have been provided a copy of another demolition quote solicited by Blackbird to finish the remaining work and they were less money for the same work as compared to the quote we have received.  We were provided an offer to settle the amount and have countered with a fair and reasonable amount.

We look forward to seeing the project complete and the Arbitration process put behind us if not settled beforehand.”

With Elder out of the project, Blackbird hired Fairfield-based Drish Construction to complete the demolition.

When asked about the resumption of activity at the work site, Rachel Wegmann, Director of Market and Communications at Blackbird, told Ottumwa Radio News:

“We are still in binding arbitration with Elder. We do not have a definitive re-start date as more progress needs to be made in our legal proceedings.”


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